UBS targets $5,000 gold price for early 2027 on rate cut expectations
Analysts at UBS predict gold will climb toward the five-figure mark in the first half of next year, supported by anticipated Federal Reserve easing and sustained institutional inflows.
UBS analysts have forecast that gold prices will rise towards USD 5,000 per ounce in the first half of 2027, citing robust support from Chinese investor buying, continued inflows into exchange-traded funds, and expected Federal Reserve interest rate easing. The prediction comes as the precious metal has gained more than 8 per cent over the past five sessions, with gold futures jumping 2 per cent on Friday following a weaker-than-expected US monthly jobs report.
The bank’s chief investment officer, Ulrike Hoffmann-Burchardi, and her team stated that the current rally has fundamental backing. They noted that recent moves by the United States and Japan to shore up the yen have eased fears of a sell-off in US Treasurys. This development reduces the risk of higher bond yields, which typically act as a headwind for precious metals by making non-yielding assets less attractive.
Hoffmann-Burchardi explained that the forecast assumes inflation will gradually moderate, allowing the Fed to hold interest rates steady this year before resuming easing in 2027. This shift toward lower policy-rate expectations is expected to reduce real yields and weigh on the US dollar, creating a more favourable backdrop for investment demand in gold. Central banks are also expected to continue purchasing gold, providing a floor to the market.
Gold prices have declined since the outbreak of war in Iran at the end of February, though they remain relatively flat year-to-date after a 65 per cent jump in 2025. While the strategists acknowledge near-term risks if oil prices rise or markets price in a more hawkish Federal Reserve rate path, they remain bullish on medium to long-term prospects for the asset.
The recent market movement followed data from the US Bureau of Labour Statistics, which revealed that the economy unexpectedly contracted by 23,000 jobs in July, contrary to an anticipated gain of 80,000. Despite the disappointing job creation figures, the unemployment rate dipped slightly to 4.1 per cent, below the 4.2 per cent consensus estimate. US equities responded positively to the mixed labour market data, with the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all rising.
